Japan Will Win the Currency War, but at What Cost?

Haruhiko Kuroda, considered a strong candidate to head the Bank of Japan, sees room for more monetary easing.

The world’s third-largest economy entangled in two decades of deflation has finally risen from the ashes and declared: Enough.

Historically, Japan is a nation that has observed the machinations of others, then essentially copied the processes, adding new standards of efficiency and quality for its competitors to follow.

Over time, higher labor costs and global competition undermined this model and is essentially the cause of Japan’s two decades of decline. In an attempt to first address the labor cost differential, Japan has embarked on a monetary strategy to weaken its currency and put Japan’s manufacturers back on equal footing with its competitors.